College finance expert explains debt cancellation for current students

After the decision to cancel some debt for those earning under $125,000, experts say current and future students are not likely to see the same loan forgiveness.

AUSTIN, Texas — The recent Department of Education‘s decision to make various student loan debt cancellations is promising for graduated students. However, current and future students are not likely to see the same relief in debt obligations and should not expect the same loan forgiveness.

Jennifer Finetti, director of student advocacy from ScholarshipOwl said current students who already have loans that they’ve taken out prior to July 1 will be eligible for the loan forgiveness. But they have to be under the income cap that was established. Finetti said if a student has an income under $125,000, or if their household income is under $250,000, any loans that they took out prior to July 1 of this year would be eligible for some loan forgiveness. But any new loans taken out after July 1 would not be eligible for loan forgiveness. 

Experts recommend the best way to keep the amount of debt you have low is by working part-time during the school year, full-time during breaks, and taking on a side hustle if you can, like driving for Uber or doing some meal delivery services. Also, applying for lots of scholarships is an option. 

“I recommend that…

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